Xiaomi has filed a lawsuit against the government in response to one of Trump’s last trade war measures.
The US has agreed to remove Xiaomi on a blacklist that would prevent investment in the Chinese tech giant, reversing a decision taken by the Trump administration last week.
Xiaomi filed a joint status report with the Department of Defense saying the two parties “have agreed upon a path forward that would resolve this litigation without the need for contested briefing” after suing the US government over the designation.
Under the Trump administration, the US Department of Defense blacklisted nine Chinese firms, including Xiaomi, from American investment in January 2021. The administration cited the corporations’ strong links to the Chinese military as justification. The firms have also been labeled as Communist Chinese Military Business.
Only two weeks later, Xiaomi filed a lawsuit, claiming that its two co-founders owned 75 percent of voting rights and that there were no military ties to ownership. It went on to say that three of its most important shareholders were US investment firms.
Following the ban, Xiaomi announced that it would now concentrate on investing in Chinese-made semiconductors. It was dubbed “Plan B” by the Chinese firm. It’s as if they were planning for the worst-case scenario all along.
It’s not shocking, though, because Huawei, a Chinese company, has been subjected to numerous bans outside of the region. Especially in the United Kingdom and the United States of America.
The ban was briefly suspended in March by a US court, which said Xiaomi was likely to win a complete reversal. It also granted an injunction to prevent “irreparable damage” to the company. The Pentagon, Xiaomi, and Chinese authorities have all declined to comment on the situation so far.
After that, Xiaomi was given permission to temporarily trade its stock in the region.
Now it appears that the matter will be resolved in more favorable terms. According to the court filing, Xiaomi and the Department of Defense have “agreed that a final order vacating the January 14, 2021 designation of Xiaomi Corporation as a CCMC … would be appropriate,” The two sides are now planning to negotiate on an order vacating the agency’s decision, with a joint proposal due by May 20th.
Xiaomi Shares Spike
Following news that Xiaomi Corp will be excluded from a US blacklist, shares in the telecoms giant rose as much as 6.71 percent in Hong Kong afternoon trade on Wednesday.
According to a Bloomberg reporter on Twitter, the corporation was removed after reaching a deal with the US Defense Department. Xiaomi’s stock was up 4.88 percent at the time of writing.
Xiaomi is also the world’s third-largest smartphone manufacturer in terms of shipments. The tech giant rallies behind Samsung and Apple.
Company Denies Any Links To The Chinese Military
The China-based giant has since then maintained that it is not influenced or operated by the Chinese military. Qualcomm Inc., a chipmaker based in the United States, was one of the company’s first investors. Furthermore, the company was co-founded by billionaire entrepreneur Lei Jun more than ten years ago.